Analysis of Economic Efficiency in Smallholder Maize Production in Northwestern Kenya

Citation:
"Analysis of Economic Efficiency in Smallholder Maize Production in Northwestern Kenya.". 2008.

Abstract:

This study investigated the contribution of integrated soil fertility management (ISFM) to economic efficiency in smallholder maize-based farming system of Northwestern Kenya. Farm-household data were used to: i) evaluate differences in economic efficiency, and ii) establish factors determining variations in economic efficiency. Stochastic production and cost frontier models were estimated using cross-sectional data from a stratified sample of 373 farmers in Trans Nzoia and Lugari districts. The results indicate that average economic efficiency was only 49%. Farmers who applied ISFM practices in maize production operated closer to their efficient frontiers than those who used inorganic fertilisers alone. Extrapolation of efficiency gains in the study area showed that enhanced technical efficiency had potential to improve maize yields by about 1.5 t/ha while better allocative efficiency could reduce production costs by KES 6,141 per hectare. It was established that in addition to ISFM, other significant factors included extension contacts, and access to credit and market. Policy interventions to improve upon economic efficiency should therefore consider these factors.

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